Colleges and universities are reporting a surge in students being asked to verify information on their federal financial aid applications, a time-consuming process that school officials fear could derail low-income applicants.
University financial aid administrators say they are astonished by the rate of verifications. Many have received about the same number of FAFSA submissions as they did last year at this time, but the number of students being flagged has doubled in some cases.
“The department has sophisticated people that we hope are building in appropriate selection criteria in the methodology, but this year, there is no rhyme or reason to what they’re doing,” said Mary Sommers, director of financial aid at the University of Nebraska at Kearney. “Did something change? We’ve heard nothing to date.”
The Education Department’s Office of Federal Student Aid said it is aware of the issue and working to fix it. The department bases verification selection on several factors, including application patterns from the previous cycle, and some significant changes last year affected this year’s selection.
Not only did the FAFSA season kick off in October instead of January, but changes were made in the requirements for tax information. That meant the patterns of when and how people applied for aid also changed, meaning the formula the department used in verification shifted.
On top of that, the Internal Revenue Service Data Retrieval Tool, a popular online resource that lets students transfer tax return information, was disabled because of hackers. All of those factors have contributed to the higher than usual number of verification requests, according to the department.
Officials say they are working to make the appropriate adjustments, and schools should see a reduction in students being flagged in several weeks. The student aid office plans to issue guidance to colleges and universities as soon as it has a fix in place.
In October alone, several public and private four-year colleges reported that the proportion of FAFSAs flagged for verification increased as much as threefold compared to the year before, according to data from the National Association of Student Financial Aid Administrators. The trade group did not disclose the names of the schools.
Around this time last year, Sommers said about 15 percent of new and returning students at the University of Nebraska at Kearney were selected for verification, but now 40 percent, or 890 people, have been flagged. The problem is especially acute among students who automatically qualify for a “zero” expected family contribution, meaning their household income is less than $25,000 a year. Out of 160 applications with that designation, 130 have been selected for verification, Sommers said.
She worries that students who are the first in their family to attend college will be discouraged by being flagged and become weary of the application process. Sommers also works with Latino parents in the midst of becoming citizens who are nervous that verification will negatively affect their chances. Though she tries to allay those fears, Sommers is concerned those families might convince their children to consider only schools they can pay for out of pocket, or forgo college altogether.
With billions of dollars in loans, grants and scholarships at stake, verification is meant to reduce the risk of fraud for the federal government and the colleges that use the FAFSA to determine student aid eligibility. The education department says it also wants to ensure that students have full access to the financial assistance to which they are entitled.
Over the years, the department has streamlined the application process by allowing families to use the IRS tool to upload tax return information. Financial aid administrators say the data retrieval tool is supposed to lower the chances of being flagged because it mines verified information, but an increasing number of students who used it since the application went live in October have been selected for review.
One Midwestern public research university said 30 percent of students who used the data tool this FAFSA cycle were flagged, compared to only 8 percent the previous season, according to the financial aid association. Another private college in the Pacific Northwest said more than 28 percent of families who used the IRS tool are being asked for more documentation, nearly triple a year ago.
Nicholas Prewett, director of financial aid at the University of Missouri, said the proportion of students who used the IRS tool and were selected for verification soared from about 7 percent to 30 percent. He finds the numbers troubling because the tool has been promoted as an easier path to completion, yet students are still running into problems.
“This means increased workload for our staff and our students,” Prewett said. His staff must contact and collect additional documents for more than 5,100 students who had been flagged for verification through Nov. 4, a caseload twice as high as the same period last year. “We try to process these in a couple of days, but if you’re looking at double the number of students. . . . it’s a lot more work, which is going to lead to additional backlog for our students.”
Delays in completing verification could take students out of the running for aid awarded on a first-come, first-served basis. Most state financial aid deadlines are months away, so students who complete verification as soon as possible will still be eligible for that aid.